T-Mobile Hopes to Shake Up the Check-Cashing Industry, Too

Apparently rattling AT&T’s cage is getting a little boring for T-Mobile.

On Tuesday, the No. 4 U.S. carrier announced a service called Mobile Money that aims to take aim at another necessary, if unpopular, segment of the U.S. economy: The finance industry.

Specifically, T-Mobile is hoping to offer an alternative for the 70 million or so U.S. adults that either have no bank account or have some bank services but still rely somewhat on check-cashing or payday-loan services. Such customers, including plenty of T-Mobile’s existing customers, are often paying hundreds or thousands of dollars in fees per year for managing their own money, T-Mobile VP Andrew Sherrard said in an interview.

“They’re really getting hammered with egregious fees by the industry,” Sherrard said, noting that the company is trying to extend the customer-friendly policies it has in wireless into the financial industry.

Through the combination of a smartphone and a prepaid Visa debit card, T-Mobile (and its banking partner, Bancor) aims to offer many of the services typically offered through a bank, including check cashing, direct deposit and bill pay.

The service, dubbed Mobile Money, allows customers to purchase and reload the card at more than 3,000 T-Mobile stores and, eventually, at Safeway and other retail stores. They can use the card anywhere Visa is accepted, and can also withdraw money, without a fee, at 42,000 ATMs across the country. Mobile Money customers can enroll in direct deposit for payroll, and personal checks and other types of checks can also be deposited by taking a picture of the check using the smartphone’s camera.

T-Mobile customers will see little or no fees from typical transactions, ranging from getting the prepaid card to depositing checks or bill payment. There are fees for non-T-Mobile customers as well as to T-Mobile customers for certain services such as immediate availability of funds from a check deposit, or same-day bill payment.

“We’ve tried to zero out all the fees that are typical if you are T-Mobile customer,” Sherrard said.

T-Mobile doesn’t expect to make money on the banking service itself, but says that it does hope that Mobile Money customers become more loyal T-Mobile wireless service customers and stick around longer. The areas where it does charge fees, Sherrard said, are in places where it has hard costs associated with offering the service.

The company conducted a nine-week trial of the service in the Miami area, and saw greater-than-expected demand for the service. Of note: While the service held the greatest appeal to prepaid customers, 40 percent of those who signed up were T-Mobile customers that receive a bill each month.

Sherrard said the service isn’t aimed to be the company’s answer to using a phone as an electronic wallet — the company is still part of the ISIS consortium for that — but is rather aimed at taking a page from overseas markets where the phone has offered an entree into banking for millions of people who previously lacked access to such services.

This article originally appeared on Recode.net.